Inheritance Tax Planning Solicitors

Also known as the nil-rate band, the Inheritance Tax threshold is currently set at £325,000 in 2024. If the total value of your estate exceeds this, a 40% IHT rate is charged. This can be reduced if a percentage of your estate is left to a charity of your choice.

Strategic gifting can reduce your IHT burden by reducing the overall value of your estate. For example, if you pay up to £3,000 tax-free each year, you are eligible for some small exemptions on your estate.

If the Inheritance Tax bill on your estate is not paid within the six-month deadline of your passing, HMRC will charge interest on the overdue amount. This will also result in the estate not being fully settled, and delays in beneficiaries receiving their inheritance.

Valuing an estate for IHT purposes involves calculating the total sum of all assets, such as property, possessions, and money, at the date of death. All debts and liabilities are deducted from this total, giving you the net value of your estate and how much IHT should be paid on it.

Charitable giving can have a major impact on an Inheritance Tax bill. For example, if you leave 10% or more of your estate to charity, the IHT rate on the rest is reduced to 36% from 40%.

Any donations to UK charities are exempt from IHT, helping you decrease the taxable value of your estate.

Yes, you can use a trust to provide for vulnerable or disabled family members without the threat of taxation. This ensures their needs are met without directly inherited assets and potentially taxed. Trusts offer a means to manage and protect funds until a beneficiary can responsibly handle them.